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The funding would help the MFI to meet growing demand from customers for range of products and services including insurance, mobile loans, loans for solar lights in addition to micro credit, SKS Microfinance says
SKS Microfinance, the largest microfinance non-banking finance company (NBFC) in India, said it would raise up to Rs400 crore in FY15 with a maximum dilution of 20% as it sets out to create ‘SKS Microfinance 3.0’ for taping opportunities presented by the transformation of Indian villages.
“Company plans new initiatives for meeting increasing requirements of customers who are benefiting from a buoyant rural economy; set to realign organisation structure to equip itself to fully capitalise on the opportunity,” the company said in a regulatory filing.
SKS Microfinance plans to address the growing demand among its customers for an entire range of products and services including insurance, mobile loans, loans for solar lights in addition to micro credit, which will remain the company’s core business.
It said, the proposed capital raise of up to Rs400 crore will fund such growth opportunities besides reinforcing the capital position of SKS Microfinance.
SKS Microfinance also issued a profit guidance of Rs125 crore for FY-2015. The profit guidance comes after its recent announcement that there could be a positive surprise in its guided net profit of Rs55 crore to Rs60 crore for FY 2014.
“SKS Microfinance believes that initiatives like cross sale which has been in pilot phase for a couple of years, will create greater value for all its stakeholders as it plans to creatively disturb the asset-revenue-earning mix. The non-micro finance institution (MFI) business will be just 10% of the Company’s assets, but it could contribute 15% of the revenue and 25% of the profit in the medium term,” the company said in the filing.
During December 2013 quarter, SKS micro finance posted 31% increase in its net profit due to robust loan disbursement growth. Its net profit stood at Rs21.4 crore from Rs16.3 crore in a same period a year ago.
At 2.20pm on Wednesday, SKS Microfinance was trading 1.4% up at Rs181, while the 30-share Sensex was marginally up at 20,242.